Cigna MA Spinoff Rumor Prompts Wall Street Hopes for Megamerger

The Cigna Group could be fielding offers for its Medicare Advantage book, according to a Nov. 6 Reuters report. Experts say that a spinoff is plausible given the small size of Cigna’s MA book and Cigna’s heavy focus on commercial insurance — and Wall Street analysts say the move could be a first step towards a megamerger with a government-focused insurer.

Wells Fargo and RBC analysts say that the move could be an effort to preempt the intense antitrust scrutiny Cigna might face if it sought to merge with a government insurance-focused firm such as Humana Inc. or Centene Corp., because Cigna would have only commercial and Affordable Care Act marketplace books after an MA spinoff.